AG says winter natural gas price spikes ‘appear to violate Kansas law,’ seeks help for investigation

The Kansas Attorney General’s Office is seeking outside legal help to investigate huge spikes in natural gas prices this winter, signaling the state could consider suing over the disaster.

Attorney General Derek Schmidt’s office announced in a news release Monday that it planned to hire a law firm with expertise in the natural gas market to help with the remainder of the investigation and “any potential civil litigation.” The office has been working since February to determine whether the high prices violated Kansas’ anti-profiteering law.

“State law prohibits ‘unjustified’ price increases for ‘necessary’ goods and services during a declared state of disaster emergency, and on their face these increases appear to violate Kansas law,” Schmidt said. “Our investigation has reached a point where additional resources and expertise in the complicated natural gas marketplace are required.”

In February, temperatures across the Midwest lingered below freezing for days. In Kansas City, temperatures stayed below 15 degrees for 10 days. Most notably at the time, the sustained cold temperatures placed a strain on the electrical grid forcing utilities, including Evergy, to shut off power to avoid uncontrolled outages like those seen in Texas.

But the cold snap also drove natural gas prices as high as 200 times the cost gas utilities typically pay. Kansas gas and electric utilities have filed plans with regulators to pass on nearly $1 billion in those excess natural gas costs to customers.

Last week, the Kansas Corporation Commission declined to issue a subpoena and seek testimony from a national natural gas price index or require a Kansas gas utility to turn over names of its suppliers to the public despite requests from an attorney who said further investigation was necessary before consumers were saddled with the costs.

Kansas’ largest natural gas utility, Kansas Gas Service, has proposed recouping $451 million in natural gas and carrying costs over five, seven or 10 years, increasing customers’ bills by anywhere from about $5 to $11 per month.